The Federation of Automobile Dealers Associations (FADA) recently released the 2024 Dealer Satisfaction Study (DSS), revealing a nuanced picture of the Indian automotive retail industry. While some manufacturers have made significant strides in improving dealer satisfaction, the survey highlights persistent challenges, particularly in after-sales support and business viability.
The DSS 2024, conducted in association with PremonAsia, surveyed 1,377 dealer principals representing approximately 4,500 outlets across various segments, including mass market four-wheelers (4W), luxury vehicles, two-wheelers (2W), and commercial vehicles (CV). The overall Dealer Satisfaction Index (DSI) for the industry stands at 768, marking only a single-point increase from the previous year. This stagnation in overall satisfaction indicates that while some areas have seen improvement, significant concerns remain unaddressed.
Dealers rate 'Product' parameters highly, praising the reliability, range, and overall quality of vehicles offered by Original Equipment Manufacturers (OEMs). However, despite these positive sentiments, after-sales support and business viability continue to be areas of concern, occupying almost two-thirds of the dealer's focus. These factors include issues such as buy-back policies for unsold spare parts, inventory management norms, and the involvement of dealers in OEM policymaking.
Segment Performance
In the four-wheeler mass market segment, JSW MG Motor emerged as the top performer with a leading score of 866 points, the highest across all segments. This shows the brand's commitment to maintaining strong relationships with its dealers and addressing key concerns effectively. Mahindra & Mahindra followed with 837 points, and Hyundai Motors India came in third with 834 points. Notably, Tata Motors showed the most significant improvement in this segment, increasing its score by 98 points from the previous year, ending at 826 points.
In the two-wheeler segment, Honda Motorcycle & Scooter India (HMSI) maintained its position as the leader for the fourth consecutive year, scoring 805 points. Despite a slight decline in the overall dealer satisfaction score for this segment, HMSI continues to set the benchmark. Other significant players include Royal Enfield, with a score of 711, and Hero MotoCorp and TVS Motor, both tied at 670 points.
The commercial vehicle segment saw Ashok Leyland taking the top spot with 817 points, surpassing its previous performance. Bharat Benz made its debut in the top three with a score of 784 points, indicating its growing presence and dealer satisfaction in this market. VE Commercial Vehicles (Eicher Motors) slipped to third place with 757 points, while Tata Motors' commercial vehicle division ranked fourth with 686 points.
Areas For Improvement
The survey indicates several opportunities for enhancement that could significantly impact overall dealer satisfaction. Key areas include:
Support in Clearing Aged Vehicle Stock: Providing support for clearing vehicle stock aged over 60 days and unsold stock at the change of the calendar year could help alleviate inventory pressures on dealers.
Warranty Labour Rates: Increasing warranty labour rates to ensure better gross margins in workshops would be a crucial step in enhancing business viability for dealers.
Involvement in Policymaking: Dealers expressed a desire for greater involvement in OEM policy decisions, suggesting that more inclusive decision-making could foster stronger partnerships and address long-standing concerns.
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